The herb company Native Essence of El Prado, New Mexico, filed a lawsuit in June 2008 against the Federal Trade Commission (FTC) over the right to provide information on the historical/traditional uses of herbs on the company’s Web site.1 Native Essence owners Mark and Marianne Hershiser say that the First Amendment of the US Constitution gives them the right to say that certain herbs have a history of effective use.2
“This is a precedent-setting case,” said Richard Jaffe, the Houstonbased attorney who filed the complaint against the FTC on behalf of Native Essence.2 “The issue has never been litigated; it not only affects the Hershisers, but all companies which sell herbal products.”
The FTC’s position since 1998 has been that making historical claims about an herb’s use is against its advertising guidelines.3 The FTC sent a package to Mark Hershiser in April of 2008, notifying him that the FTC was penalizing Native Essence for publishing traditional use claims for herbs on its Web site.
Within the FTC packet, Hershiser was offered the option of signing a settlement in which he would have to send out a letter explaining that his company Web site contained “false, misleading” and “unsubstantiated”2,4 historical/traditional use claims for herbal products sold by the company.4 In addition, the settlement would require that Native Essence pay the FTC all the money from sales of the herbs that the agency deemed as having unsubstantiated claims. (The business has been in operation for 15 years). As an alternative, Hershiser could provide detailed personal and corporate financial disclosure to the FTC so that the agency could assess his current financial worth, and he could pay that instead. If Hershiser decided against the settlement, the matter would go to court, and the FTC would reserve the right to freeze his assets during that time.
According to Hershiser, the FTC later informed him that it had previously sent him a warning letter in August of 2007 in e-mail form. Hershiser said that he receives large amounts of junk mail daily and never saw the first warning; it wasn’t until April 2008—when he was informed of his choice of penalties—that he learned of the FTC’s complaints against his company.
Hershiser said that he felt unable to accept the terms of the FTC settlement offer. Although the FTC letter contained a disclaimer specifying that acceptance of the settlement would not constitute an admission of having violated the law, Hershiser believed that signing the document would be tantamount to signing a confession.
“They say it is not an admission of guilt, but it sure appears to be that to me. If I am not guilty of anything then why would I have to send letters to my customers and why would I have to pay any money?” said Hershiser (e-mail, August 13, 2008). “I can’t confess to something when I don’t feel I’ve done anything wrong,” he added (oral communication, August 4, 2008). “I believe in herbs and I don’t think there’s anything wrong with passing on what my ancestors used them for.”
Rather than agree to the settlement and pay penalties, Native Essence decided to challenge the constitutionality of the FTC’s advertising guidelines for dietary supplements that prevent historical use claims. Native Essence, however, has currently removed information about traditional uses from its Web site, as a sign of good faith until the matter can be resolved.5
“Herb sellers should be able to tell consumers that an herb has a long historical use to treat a disease,” said Jaffe.2 “The FTC’s prohibition of this kind of truthful information is unreasonable and unconstitutional.” Jaffe has a long history of activity in promoting “health freedom” issues and defending various alternative medicine practitioners whose practices have been deemed inappropriate or illegal by regulatory agencies.
Native Essence is specifically challenging pages 20-22 of the FTC’s guidelines for the advertising of dietary supplements—a section called “Claims Based on Traditional Use” (section II-C-2).3
“Specifically, it is the first sentence of that section that the plaintiffs are attacking, along with the FTC’s application of the section to implied claims based on historical use,” wrote Jim Prochnow, an attorney based in Colorado who specializes in food and drug issues (e-mail to M. Blumenthal, June 30, 2008). “In addition, the plaintiffs ask the Court to enjoin the FTC from using the section of the Advertising Guide when assessing substantiation of claims [for dietary supplements].”
The Native Essence complaint also compares the FTC restriction of posting traditional uses of herbal medicine to a commercial Web site as a violation of the privacy rights of citizens. “Consumers have the right to receive this information so that they can make decisions about their health,” said Jaffe (e-mail, July 30, 2008). “If herb sellers are disallowed from providing such information, the regulation adversely affects the right of privacy.”
The FTC has even taken the stance that linking to Web sites that contain information about traditional uses is illegal, even if the pages link to government Web sites containing the same information about herbs. “According to the FTC it is just as illegal for a company to link to historical-use information from a nonprofit entity which doesn’t sell herbs,” said Jaffe.
“If we lose our freedom to pass on information, what have we got?” Hershiser added (oral communication, August 4, 2008). “If we lose that right, we might as well close up shop and go home.”
The FTC filed a motion to dismiss the lawsuit in July of 2008, maintaining that the federal court cannot enjoin an agency enforcement action, especially one that has not yet been filed. Since the matter has not gone to court, the FTC points out that “further proceedings could result in an administrative complaint, a federal court complaint, or nothing at all.”6
The plaintiffs responded to the motion in late August. “The FTC is wrong that the federal court can’t hear the case now,” said Jaffe, explaining Native Essence’s response. “After threatening to file a federal action against them based in part on their historical use claims, which the FTC claims violates its guidelines, and after insisting that the Hershisers sign a permanent injunction which would be filed in the New Mexico district court, it’s surprising that the FTC claims that the very same court does not have the power to decide whether the guidelines are legal” (e-mail, August 28, 2008).
“In my opinion, the point that Native Essence raises about the use of federal government information about the traditional or historical use of ingredients is a worthy issue,” said Prochnow (e-mail to M. Blumenthal, August 13, 2008). Prochnow added that the industry will surely learn more about the legal ramifications of this lawsuit as the situation unfolds.
—Kelly E. Saxton